10. P Company purchased 90% of the outstanding common stock of S Company on January 1, 2010...
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Question:
10. P Company purchased 90% of the outstanding common stock of S Company on January 1, 2010 . S Companys stockholders equity at various dates was:
1/1/10 1/1/14 12/31/14
Common stock $400,000 $400,000 $400,000
Retained earnings 120,000 380,000 460,000
Total $520,000 $780,000 $860,000
The workpaper entry to establish reciprocity under the cost method in the preparation of a consolidated statements workpaper on December 31, 2014 should include a credit to P Companys retained earnings of
a. $80,000.
b. $234,000.
c. $260,000.
d. $306,000
Please write down calculation process, thanks
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